Senate Approves Blender's Tax Credits

 - August 8, 2022, 1:43 PM

The Inflation Reduction Act of 2022, which passed the Senate on Sunday through a tiebreaker vote by Vice President Kamala Harris, is drawing praise for provisions that would provide incentives for sustainable aviation fuel (SAF), including a blender's tax credit.

The bill would provide a tax credit to qualified biodiesel producers or blenders on a sliding scale, depending on greenhouse gas emissions savings, valued at $1.25 to $1.75 per gallon for 2023 and 2024. Beginning in 2025, a Clean Fuel Production Credit would provide incentives up to $1.75 per gallon.

“The commercialization and scale-up of sustainable aviation fuel will accelerate our industry’s progress to net-zero carbon emissions. The SAF tax credits included in the Inflation Reduction Act of 2022 are a crucial first step toward meeting the Biden Administration’s SAF Grand Challenge goal of three billion gallons of domestically produced SAF by 2030,” said National Air Transportation Association (NATA) president and CEO Timothy Obitts. “Equally crucial is the removal of regulatory roadblocks that hinder SAF participation in the Environmental Protection Agency’s Renewable Fuel Standard program. NATA applauds the U.S. Senate for taking action to incentivize SAF production, and we encourage Congress to work just as diligently to equip federal agencies, including EPA, with the necessary tools to support SAF production in line with industry demand.”

"Through the Business Aviation Commitment on Climate Change, our industry has pledged to achieve net-zero CO2 emissions by 2050, and increasing the availability of SAF at general aviation airports is crucial to achieving our goal,” added NBAA president and CEO Ed Bolen. “Establishing a robust federal tax credit for SAF is the single most important thing policymakers can do to increase production and availability.”

Aerospace Industries Association (AIA) President and CEO Eric Fanning also praised the inclusion of the blender's tax credits, saying they “will play a critical role in enabling a more sustainable aviation system now and in the future.”